Commercial Lease Agreement

The written document that emphasizes the contract between a proprietor and tenant is called the commercial lease agreement.

A Commercial Lease Agreement sets down conditions, regulations and obligations that the proprietor and tenant have to abide. The agreement also establishes the rent. Rent is the dues that should be paid by the Tenant to his or her Landlord in consideration or as exchange for the private use of the proprietor’s property.

Whereas you can find a standard sales agreement form, there is no standard form for commercial lease agreements. The outcome of the proprietor and potential tenants’ negotiations are exclusive and are contained in the final commercial lease agreement. It becomes legally binding once they have both affixed their signatures in the document.

Certain basic elements of every commercial lease agreement:

• Names of the landlord and tenant and other parties involved and their signatures


• Identification of the property address


• The dates of when the contract starts and terminates


• Determination of the amount of rent


• Complete details of rent deposits

Another element in the commercial lease agreement between a proprietor and tenant is the interval of payment. The most common is monthly payment. Meanwhile, the usual amount of rent is determined according to rental area calculations, for example, the sum of each square feet of the area.

The commercial lease agreement can be binding for whatever length of time agreed by both parties. However, sometimes, the proprietor already pre-sets the lease term before coming up with an agreement with a tenant.

Short-term lease usually spans less than a year or up to one year only. However, there are also short-term leases that go up to 3 years, depending upon specific interpretation. A set monthly rate or gross lease is usually required of a short-term lease tenant.

On the other hand, long-term lease tenants are required to pay periodic increases in their monthly rent. The increases are recognized as compensation for owner due to the rising amounts of insurance, property taxes, common maintenance supplies and other utilities.

Provisions in the commercial lease agreement regarding long-term leases are specified if they are double net lease, triple net lease or quadruple net lease.

Just the property owner and tenant or a common witness works out most commercial lease agreements. However, if it involves large real estate property, for example, the guidance of a corporate lawyer may be needed for certain clarifications.

The lawyer can also stand as witness as both parties confirm and acknowledge all the stipulations of the commercial lease agreement. Our corporate attorneys may be a great help for you.